Loans bring benefits to the majority of borrowers, the Finance and Leasing Association said today.

Debt may be growing in the UK, but most borrowers manage their loans sensibly and benefit from the financial stability they bring, spokesperson Edward Simpson said.

Mr Simpson explained: "It's a minority of people that get in to trouble… The borrower's got to make sure that they don't overextend themselves and that they're in a position to repay outgoings."

People are more likely to get into trouble with debt if hit with unforeseen circumstances such as redundancy or divorce, he added.

Loan insurance can help in this regard, but only where customers are fully clear of terms and conditions.

The Finance & Leasing Association (FLA) is the principal representative of the asset, consumer and motor finance sector in the UK.

In January Britons took out £324 million of secured borrowing and £36 million unsecured, according to figures from finance charity Credit Action.

 Source: London Stock Exchange